Schizophrenia is one of the most debilitating mental disorders. Auditory hallucinations, which are known to be closely related to interpersonal relationships, are the most common type of hallucinations observed in the course of schizophrenia. Virtual reality has been developing in various fields with the development of computerized technologies and has started to appear in the field of clinical psychology in the form of virtual reality therapies. Avatar therapy is among the interpersonal-based virtual reality therapy models that focus on auditory hallucinations among the symptoms of schizophrenia. The aim of avatar therapy is to enable the person to have control over auditory hallucinations. Within the scope of this review study; the past, present and future of schizophrenia treatment, effective intervention methods in the treatment of schizophrenia, virtual reality therapy, the main outlines of the avatar therapy model, the effectiveness studies of avatar therapy and ethical issues were discussed. The results of the research on the effectiveness of avatar therapy reveal the need for further research in this field.